Why I Would Never Buy my Investment Property Directly from a Developer – by Mohamed AbdulRahman, Star International Real Estate
So, you have decided to take the plunge and invest in a buy-to-let property.
The first question that pops to your mind is where to start your search. Do you search for options online? Do you visit a developer’s sales office? Should you buy a completed property or off plan? There are many questions to answer, and while there isn’t one right or wrong way to go about this process, I for one would start my search by approaching a local real estate agency. Why you might ask? The following are the reasons why you should always purchase your investment/buy-to-let properties from a real estate agency:
1. Free service:
Certain agencies will carry out the entire purchase process for you free of cost. And no, they will not do that because they like you or find your cause charitable. As competition in the real estate market has increased, especially among developers who are building apartment blocks, many developers are offering agencies higher commission rates. This allows you, the purchaser, to negotiate a free service with the agency, whereby they will carry out all the admin work related to the purchase.
2. Free advice:
Since you are now the agency’s client, you can always ask for their advice on where they believe, based on their experience, you will achieve the best capital gains or the highest yields. An agency who is active in both sales and leasing will be able to tell you what the going rates are for a certain type of property, whether there is a demand for said property or not. One example we always come across, is whether you should pay a premium for higher floors or views. In my experience, the premium paid never translates into a higher rental yield. The property might rent faster, but it will not command a significantly higher rent.
3. One stop shop:
Since the purchase was made through the agency, they will be familiar with the property and that will enable them to list it for sale during construction or rental after completion with no issues.
4. Professional liability:
Yes, I am sure there are those of you who are saying real estate agents are not trustworthy, but with new regulations being introduced in Bahrain by RERA, real estate agencies are liable for any advice they provide, and they are required to adhere by a strict code of conduct. Bottom line, shop around with two or three agencies until you find one which you feel comfortable dealing with.
This article was first published in Trends Vol. 2